The Facebook Fallacy • Hacker News Board

Re: The Facebook Fallacy

#11

Post by einhverfr » Sat, Jul 21, 2012, 5:59 AM UTC

paulsutter wrote: post #10

Advertising is a $600B a year business, and the Internet still has yet to catch up with other media in terms of share of total budget versus time spent on the medium. Google just reported revenues up 35%. It's all advertising, driven by high quality algorithms and lots of data. Internet advertising is more effective than other media and we're still just scratching the surface. I'd like to comment on all the specific…

But internet advertising is a relatively lousy form of advertising. Compare to print and radio ads.

I hear a radio ad. It is interesting. I write down the number and call the person. Not ideal, but I am reminded by the medium that I must act now or else I lose the info of the ad. Same with tv ads. But even to ensure people can follow up you have to have the ad repeated over and over.

With print ads, I can cut them out and save them. Less urgency, and a lot of durability.

Online advertising, with the possible exception of advertising on search engines, provides the illusion of durability without delivering it. So it's an inferior medium.

I am not saying that online advertisements are doomed. I think we haven't figured out how to do it, and borrowing print analogies isn't sufficient. Or perhaps, if we are going to borrow print analogies we ought to take them all the way (selling ad space on specific pages on a non-rotating basis for example).

Re: The Facebook Fallacy

#12

Post by spaghetti » Sat, Jul 21, 2012, 6:02 AM UTC

dave1619 wrote: post #5

zalew wrote: post #4

Earlier quoted context omitted.

ad networks targeting you with details about your health is not helpful, it's creepy and invading a very private aspect of life. btw it's already done http://www.forbes.com/sites/kashmirhill/2012/02/16/how-targe...

it's not just health. look at Google Now on android 4.1. they're going to know everywhere you went and a lot more info. sooner or later, this will likely lead to targeted ads if they can deliver high-value ads the user actually wants. ie., [you're driving past your favorite pizza shop] Pizza Boy is offering $5 off today your normal order. Should i place the order for you?" the reason most everyone will opt in is beca…

I'm skeptical of the "driving by the pizza place" examples. Physical proximity to the pizza place usually doesn't imply any intention to consume pizza. There has to be a stronger signal. I'm physically close to a pizza parlor and I just searched for "dinner and beer" would be enough to assume I have some intention of consuming pizza hence advertising the pizza parlor at that moment is valuable to both myself and the business.

Advertising based entirely on physical proximity could be almost useless. Imagine driving through downtown at 11 PM on a Friday night. As you pass the dentist you're prompted with "50% off your next teeth cleaning!". As you pass the park you're prompted with "Sunday Parade at the Park!". As you pass the liquor store you're prompted with "Beer sale!". Finally something useful. However by this point I would probably be ignoring the ads.

Re: The Facebook Fallacy

#13

Post by paulsutter » Sat, Jul 21, 2012, 6:04 AM UTC

einhverfr wrote: post #11

paulsutter wrote: post #10

Advertising is a $600B a year business, and the Internet still has yet to catch up with other media in terms of share of total budget versus time spent on the medium. Google just reported revenues up 35%. It's all advertising, driven by high quality algorithms and lots of data. Internet advertising is more effective than other media and we're still just scratching the surface. I'd like to comment on all the specific…

But internet advertising is a relatively lousy form of advertising. Compare to print and radio ads. I hear a radio ad. It is interesting. I write down the number and call the person. Not ideal, but I am reminded by the medium that I must act now or else I lose the info of the ad. Same with tv ads. But even to ensure people can follow up you have to have the ad repeated over and over. With print ads, I can cut them ou…

I agree that there are a lot of advancements to be made. However, my experience is that Internet ads are already more effective.

But forget all that, are you ready to bet me $1 over the future of online ads? Go ahead and formulate the terms. I'll take the optimistic side and you can have the pessimistic side of whatever you come up with.

Re: The Facebook Fallacy

#14

Post by dave1619 » Sat, Jul 21, 2012, 6:06 AM UTC

spaghetti wrote: post #12

dave1619 wrote: post #5

Earlier quoted context omitted.

it's not just health. look at Google Now on android 4.1. they're going to know everywhere you went and a lot more info. sooner or later, this will likely lead to targeted ads if they can deliver high-value ads the user actually wants. ie., [you're driving past your favorite pizza shop] Pizza Boy is offering $5 off today your normal order. Should i place the order for you?" the reason most everyone will opt in is beca…

I'm skeptical of the "driving by the pizza place" examples. Physical proximity to the pizza place usually doesn't imply any intention to consume pizza. There has to be a stronger signal. I'm physically close to a pizza parlor and I just searched for "dinner and beer" would be enough to assume I have some intention of consuming pizza hence advertising the pizza parlor at that moment is valuable to both myself and the…

The pizza example would be more like you're driving home from work at 5:30pm on Wednesday on your typical route which passes by the pizza shop. Google Now knows that it's dinner time and that you've purchased from that pizza place before on a Wednesday for dinner. Thus, it "alerts" you of a special deal if there is one.

Re: The Facebook Fallacy

#15

Post by einhverfr » Sat, Jul 21, 2012, 6:15 AM UTC

paulsutter wrote: post #13

einhverfr wrote: post #11

Earlier quoted context omitted.

But internet advertising is a relatively lousy form of advertising. Compare to print and radio ads. I hear a radio ad. It is interesting. I write down the number and call the person. Not ideal, but I am reminded by the medium that I must act now or else I lose the info of the ad. Same with tv ads. But even to ensure people can follow up you have to have the ad repeated over and over. With print ads, I can cut them ou…

I agree that there are a lot of advancements to be made. However, my experience is that Internet ads are already more effective. But forget all that, are you ready to bet me $1 over the future of online ads? Go ahead and formulate the terms. I'll take the optimistic side and you can have the pessimistic side of whatever you come up with.

I will say that in my experience, depending on audience, I have found radio ads and general PR efforts to both be more effective at reaching consumers than I have found internet ads. Speaking strictly of ROI.

I am willing to say that the following forms of advertising are doomed:

* rotating banners

* rotating in-content image ads

* pop-up ads (whether div- or window-based)

* side-bar ads in content

The real challenge I think is to replicate the success at search engine advertisement (which seems to be good) elsewhere. For this reason I think that whatever ends up working will be very different than what we have now.

Yeah, I'd bet a dollar on that proposition.

Re: The Facebook Fallacy

#16

Post by malandrew » Sat, Jul 21, 2012, 6:20 AM UTC

It's not that internet advertising isn't effective. It's that all the content it's wrapped around is too engaging.

The reason ads in real-life are effective is that they traditionally haven't had to compete for your attention. Examples:

(1) Standing on a subway platform you are looking straight at a piece of advertising for minutes until your train arrives. (2) Driving down the road, you're staring at a billboard for 1/4 of a mile (15 seconds at 50mph). (3) On TV and on the radio, inertia to change the channel means you often listen to ads.

The problem for those media is that we are now reaching the point where content is portable enough that we now never have to be subject to ads in those public spaces because we can direct our attention to our mobile devices. Over the next for years you're going to see a massive drop in the effectiveness and reach of ads in real life because people will no longer be directing their surroundings.

The only one of the above examples that will survive a while are billboards and even they will only last until we have self-driving cars. Once we have self-driving cars, why even bother looking at the road instead of our iOS and Android devices?

Re: The Facebook Fallacy

#17

Post by spaghetti » Sat, Jul 21, 2012, 6:20 AM UTC

dave1619 wrote: post #14

spaghetti wrote: post #12

Earlier quoted context omitted.

I'm skeptical of the "driving by the pizza place" examples. Physical proximity to the pizza place usually doesn't imply any intention to consume pizza. There has to be a stronger signal. I'm physically close to a pizza parlor and I just searched for "dinner and beer" would be enough to assume I have some intention of consuming pizza hence advertising the pizza parlor at that moment is valuable to both myself and the…

The pizza example would be more like you're driving home from work at 5:30pm on Wednesday on your typical route which passes by the pizza shop. Google Now knows that it's dinner time and that you've purchased from that pizza place before on a Wednesday for dinner. Thus, it "alerts" you of a special deal if there is one.

Yes that would probably work. I think the pieces of the signal in decreasing importance are: you purchase from a business frequently, the current time is close to the average time at which you purchase from that business, you're physically close to the business.

I wonder if physical proximity really matters relative to the other two pieces? Pizza places can deliver so even if you're across town the ad could still have value. Corner case is when you're on travel and physical distance is very large.

Re: The Facebook Fallacy

#18

Post by jacques_chester » Sat, Jul 21, 2012, 6:22 AM UTC

paulsutter wrote: post #10

Advertising is a $600B a year business, and the Internet still has yet to catch up with other media in terms of share of total budget versus time spent on the medium. Google just reported revenues up 35%. It's all advertising, driven by high quality algorithms and lots of data. Internet advertising is more effective than other media and we're still just scratching the surface. I'd like to comment on all the specific…

> Advertising is a $600B a year business

The point is that, from an advertiser's point of view, most of that money is wasted. Insofar as they can target ads and pay less for them, they will.

That $600 billion is not going to transfer on a 1:1 basis into the internet advertising market.

Re: The Facebook Fallacy

#19

Post by jacques_chester » Sat, Jul 21, 2012, 6:23 AM UTC

malandrew wrote: post #16

It's not that internet advertising isn't effective. It's that all the content it's wrapped around is too engaging. The reason ads in real-life are effective is that they traditionally haven't had to compete for your attention. Examples: (1) Standing on a subway platform you are looking straight at a piece of advertising for minutes until your train arrives. (2) Driving down the road, you're staring at a billboard for…

It's happening already -- in Australia one television station (Ten) just sold its outdoor billboard subsidiary for what is, basically, a song.

Re: The Facebook Fallacy

#20

Post by paulsutter » Sat, Jul 21, 2012, 7:13 AM UTC

einhverfr wrote: post #15

paulsutter wrote: post #13

Earlier quoted context omitted.

I agree that there are a lot of advancements to be made. However, my experience is that Internet ads are already more effective. But forget all that, are you ready to bet me $1 over the future of online ads? Go ahead and formulate the terms. I'll take the optimistic side and you can have the pessimistic side of whatever you come up with.

I will say that in my experience, depending on audience, I have found radio ads and general PR efforts to both be more effective at reaching consumers than I have found internet ads. Speaking strictly of ROI. I am willing to say that the following forms of advertising are doomed: * rotating banners * rotating in-content image ads * pop-up ads (whether div- or window-based) * side-bar ads in content The real challenge…

I'm asking for a bet on the future of Internet advertising generally. Not to take a collection of the shittiest known implementations of advertising and bet on them.

I'll interpret your response to mean you think Internet advertising (considered broadly) will be successful, and I agree with you. In contrast with the technology review post which predicts some sort of bizarre general "collapse" of the Internet (presumably of advertising as a business model).

If not please reform your bet accordingly.

ps, love to engage in an email discusion to hear more about the radio and pr(?) campaigns you have run that have worked better than Internet media.